She added that the decision wasn't a result of the recent acquisition of AltaVista by CMGI.

"It was made purely on the needs of our advertisers and our users," Roberts said.

"Most critics, when they saw the program, said 'oh, this is fine,'" Sullivan said. "Whether they would have [plainly distinguished the paid links] had all this publicity not come up beforehand is another story."

"AltaVista is about being objective and providing the depth of information users want," Roberts said.

The news is a mixed blessing for rival search engine GoTo.com, which sells all search results on its site, and even tells visitors how much advertisers paid to be listed.

GoTo was quick to try and take advantage of AltaVista's bad publicity when it announced the service, releasing statements saying consumers could hardly argue with its version of paid placements, since it was being honest and up-front with the information.

GoTo again tried to make hay out of Thursday's news from AltaVista.

"AltaVista is now discontinuing their model because they feel that it didn't work," said GoTo spokeswoman Alayna Tagariello in an e-mail Thursday. "However, in GoTo's view, it was that AltaVista did not properly implement the bid-for-placement model."